The financial model of LH updates

The financial model of LH updates

This post is more for indie developers who want to know how much money things make.

First some basics on game budgeting:

Every person on your game you should budget at $10,000 per month. It’s a good rule of thumb.

You should target a 25% “profit” on your game to cover the unexpected as well as for future growth

Steady State income represents the gross income of your game without sales, promotions, new releases, etc.

Steady state takes 6 months to eliminate the “new game” anomaly.

You need to take opportunity cost into account when budgeting (am I better off working on this versus that?)

Opportunity cost is hard to calculate and is what kills most studios long-term.

The steady state of LH is $40,000 per month.

That doesn’t mean its annual income is $480,000 a year because there are lots of events that cause income spiking (Christmas is a 4X spike, Thanksgiving is a 2X spike, and the Steam July sale is a 3X spike.

For LH, that means I could justify 3 resources on it before taking opportunity costs into account. Once I consider opportunity costs, the number declines to 1 because those other 2 resources are better off on Galactic Civilizations III or Star Control or “Elemental 3” or what have you.

Before anyone poo-poos 1 resource, bear in mind that I made the original Galactic Civilizations by myself. So 1 person can still get a lot done. But that’s where we are. 1 person means that the game can continue to evolve. Some months it might be an artist. Another month a developer. In January, it was Charles (programmer) fixing bugs and tweaking. In February it was Kael doing new balance changes. In March it’ll probably be me (I have anger management issues with the game’s pathfinding).

The main funding source: DLC

DLC is really the funding source. The base game is doing $25k and DLC is picking up the remaining $15k. In effect, DLC purchases are providing the $10k resource and the $5k profit necessary to keep the game going.

The next DLC: Spouses

For those of you reading this, the next DLC is going to allow players to have spouses. Kael has meticulously designed a spouse for each player (and to be honest, they’re way cooler than the sovereigns because Kael got to really go crazy with these).

The one AFTER Spouses will probably (but not certainly) be Random Map expansion. That is, a lot more “interesting” stuff for random maps. I plan to do this one myself as I’d like to see random maps made a lot more interesting and I’ve had a lot of practice in the past year in my own “for fun” mods.

Quick request for Spouses DLC. If you're going to let us have children, and those children inherit traits from their parents, can we have a tag that disallows certain traits from getting inherited? I have a lot of traits in Children of Storm that should definitely not be inheritable - having consumed the Ambrosia to become Immortal, finding a sworn dragon egg and becoming a Dragon rider, being turned undead, having dual bloodlines and so on and so forth.

Or maybe the system is going to be completely different, like how spouses are handled in Total war series or King Arthur the RP Wargame. You get to select them from a pool and each provides a special boon.

For those of you reading this, the next DLC is going to allow players to have spouses. Kael has meticulously designed a spouse for each player (and to be honest, they’re way cooler than the sovereigns because Kael got to really go crazy with these).

It would be reeeally sweet if the sovereigns got some love with the DLC as well.

Also, will the AI be able to handle the spouse thing? It still has issues dealing with some core features, so I have my doubts that it will magically know what to do with another new game mechanic.

Frogboy doesn't ever actually mention dynasties or children, only "spouses". Just doesn't seem very clear exactly what this will all include.

Well I am assuming some form of dynasties. I hope I didn't put words in frogboy's mouth.

But since children are already in the code (lets just say I messed with something in elementaldefs.xml, and there's a certain cheat keystroke, and have had units in my game that I am pretty sure were children), if spouses are coming I assumed I could have LEGITIMATE URXEN BABIES at last.

Even if it's spouses only, I'm still very excited to see what Kael has planned.

I guess I'm the only one here that's indifferent to spouses/children/dynasties.

I am as well, I'm just hoping the DLC isn't going to include something really cool, that will make me want the DLC despite the dynasty/spouse/children thing. Not really to worried yet, I'll wait til it's released and see if I have anything to actually worry or bitch about.

For those of you reading this, the next DLC is going to allow players to have spouses. Kael has meticulously designed a spouse for each player (and to be honest, they’re way cooler than the sovereigns because Kael got to really go crazy with these).

The one AFTER Spouses will probably (but not certainly) be Random Map expansion. That is, a lot more “interesting” stuff for random maps. I plan to do this one myself as I’d like to see random maps made a lot more interesting and I’ve had a lot of practice in the past year in my own “for fun” mods.

Cheers!

By 'designed a spouce for each player', do you actually mean each race type? (Only because customer sovereigns will want spouces too.) A little leary that spouces will be more fancy than the sovereign's themselves...they should add to the flavor...not be the flavor.

I'm a student for a Bachelor's in Industrial Engineering, and I find such insights on the inner workings of a living business to be invaluable.

As I re-read your post, it seems to me as if you confused your two criteria. At first, you talk about the steady state income of LH and state that development of DLC for it is worth 3 employees (first criterion) . Then you examine it from the second criterion perspective and arrive to LH's DLC being worth only 1 employee. You then state that DLC sales are effectively the budget for new development of further DLC, and thus we put only one full-time employee on developing them.

This last statement is actually the first criterion, in more concrete form. Availability of DLC have very little correlation to the income from sales of the core product (as far as I know), and thus has little to do with the budgeting for further DLC. The budget for any development is (as stated) 75% of the expected return, and since you expect 15k monthly return on DLC it's reasonable to have only one employee working on it.

HOWEVER. You say that the current level and amount of DLC nets to 15k monthly. You take this number and extrapolate that having more than a single employee on DLC for LH is not worthwhile. This logic is totally backwards. You have shown no causation between the number of employees and the expected revenue. I know that such a causation exists, and that it is quite difficult to calculate or predict (as the case might be), but evaluating said causation is the right way to approach the problem*.

*The problem being the search for an optimal assignment for employees to projects. If all data is available an optimal solution can be calculated. The data is never completely available, however, and that is why there's demand for people in my profession (I hope).

HOWEVER. You say that the current level and amount of DLC nets to 15k monthly. You take this number and extrapolate that having more than a single employee on DLC for LH is not worthwhile. This logic is totally backwards. You have shown no causation between the number of employees and the expected revenue. I know that such a causation exists, and that it is quite difficult to calculate or predict (as the case might be), but evaluating said causation is the right way to approach the problem*.

*The problem being the search for an optimal assignment for employees to projects. If all data is available an optimal solution can be calculated. The data is never completely available, however, and that is why there's demand for people in my profession (I hope).

It's been awhile since I felt the need to write a reply. You should have stopped typing after your first line. The first line was great!

I've been playing his (brads) games for at least 10 years now. What your seeing is an indi (kinda) developer making games and actually telling you how to budget in simple terms. Your long winded extrapolation of the matters of real life didn't need to happen. As a student you just listen and be gracious.

Every person on your game you should budget at $10,000 per month. It’s a good rule of thumb.

Just in case there are any aspiring game programmers out there reading this post thinking they can be an average joe developer and make 120k a year, that 10k a month is often refereed to as the "fully loaded" cost. Which includes all those fun overhead items businesses have to pay like taxes and insurance.

Don't get me wrong, you can certainly make a great living being a business/game programmer, make 6 figures and all that, but these kids coming straight out college thinking the're going to get paid like a 10 year veteran crack me up.

Could be good, could be boring but I will hold judgement till we hear much more about it. I will likely still buy it though because I do want future LH content and the only way I can get it is by showing support.

Random Map Expansion DLC, the name alone makes it an automatic purchase for me.

Could be good, could be boring but I will hold judgement till we hear much more about it. I will likely still buy it though because I do want future LH content and the only way I can get it is by showing support.

Random Map Expansion DLC, the name alone makes it an automatic purchase for me.

I'm going to be the party pooper here, but I disagree.

I want LH to be successful and continue into the future as well, but when SD takes a swing and misses (releases a "meh" DLC), I vote with my dollars and would skip that one.

However, I agree that a random map expansion DLC sounds like a great idea!

Don't get me wrong, you can certainly make a great living being a business/game programmer, make 6 figures and all that, but these kids coming straight out college thinking the're going to get paid like a 10 year veteran crack me up.

Now I have to reply again!

I opened my mouth forthe Gazing kid. You can do all that you want in life Gazing, but don't think a college education will teach you about the real world. There are so many ins and outs for everything that only living your life can teach you. Gazing, please don't come out of college thinking you know it all. Because simply, you will not. I don't. Brad don't. My kids don't. You don't.

I hope you success in life, but please don't think you own it. Visiting the forum here is fun for me. I don't have much time to sit and play the game(s). I work in business, and Brad has explained many things in the development process that have helped me in the real world. And my business is nothing close to game development.